Frank Emery says:

I might put more credance in your comments about the semiconductor industry if your beginning facts were correct. As it is, your article clearly shows that you do not understand the semiconductor industry. The improvements brought about by them are instrumental in the productivity improvements of industry today and improved quality of life on a global basis.

1. Jack Kilby of Texas Instruments is credited with the invention of the integrated circuit. Noyce’s patent application was slightly later, hence TI holds the basic IC patents.
2. Noyce and Hoerni of Fairchild invented the planar transistor process, which allowed the integrated circuit to be produced at reasonable costs. These costs are ever declining as a result of two manufacturing economies.
2a. The first economy is the ever increasing size of the silicon wafer which the chips are manufactured upon. The early wafers were about 1 inch diameter (25 mm). The current wafers are 300 mm or about 12 times larger. Since the number of circuits go as the square of the diameter ratio, there are 144 times more circuits on the current wafers than when the IC was invented.
2b. The circuits are defined by photographic processes and the measure is the minimum feature size. The early circuits were made with 0.005 inch feature sizes (or 125 microns, 125,000 nanometers. Currently the feature size is crossing 100 nanometers, aiming at 50 nm. This allows for circuits to be 1000 times smaller than the very first ICs. Note that the smaller circuits pick up speed automatically, the scaling is more complicated than the feature size alone…hence we have GHz clock speed microprocessors and ICs (using Silicon) capable of operating the cell phones.
3. The reduced feature sizes and material processing improvements have allowed complicated electronic circuitry to be manufactured with similar processes as the earlier circuits–as you state in your article. However, the learning process has allowed ever more complicated circuitry–eliminating much of the wiring and printed circuit board approaches required. Another cost savings.
4. All of these cost savings have allowed complicated electronic equipment to be produced at ever decreasing cost. Today, the computer on your desk is probably equivalent to an early IBM 360.
5. Coming with the improved performance and cost has been a dramatic improvement in quality. Do you remember how the old TVs needed to be have their tubes checked periodically at the 7-11 store. Now we have TVs that do not have problems for years, maybe even decades. Similar improvements have also impacted electronic instrumentation, etc.
6. Semiconductor manufacturers have improved the environment that the circuits will operate. Without the special computers in automobiles (as an example) the concepts of smog control and fuel efficiency required by our clean air concepts would not be possible. The engine compartment of an automobile is very difficult for the circuits to operate.
7. It is true that there are diminishing returns coming for the improvements, however it looks like they are 15 to 20 years away. Hopefully, some other technology switching techniques will be available as we go forward–however, none have been found that are capable of competing with the IC yet. If they had been found, they would be in use.
8. While the circuits have an ever declining price, that results from an ever declining cost. This ever declining cost results from the natural improvements that have been developed to improve the electrical performance of the transistors (and hence the ICs). Competition has resulted in lower prices–but the smart companies know that will occur. The smart companies use the declining cost to their advantage, driving out the competitors that are inadequate.